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Microcap & Penny Stocks : NEOTHERAPEUTICS (NEOT) (NEOTW) -- Ignore unavailable to you. Want to Upgrade?

To: John G. Mueller who wrote (581)	11/6/1998 1:30:00 PM
From: Marty	Read Replies (2) \| Respond to of 705

Each common stock purchase warrant entitles the holder to purchase one share of common stock at an exercise price of $11.40 per share. The common stock purchase warrants expire 5 years from September 26, 1996. Outstanding common stock purchase warrants may be redeemed by the Company, in whole or in part, at any time upon at least 30 days prior written notice to the registered holders thereof, at a price of $0.25 per warrant, provided that the closing bid price of the common stock has been at least $22.80 for the 20 consecutive trading days immediately preceding the date of the notice of redemption. ======================= So, if you buy warrants at say, 5, and the stock goes to say, 22, you could take your warrant to the company and say, "Here is $11.40 and a warrant, give me a share of stock." You could sell the share they give you at 22 and have a profit of 5.60 (22-(11.40+5)). In this example, you would more than double your money. In practice, you would not have to go to the company and undertake all that bother and just sell the warrant on the open market for what would be around 10+ to reflect the same profit. The price of the warrant has a time value component to include the option to do this any time until September, 2,001. The intrinsic value of the warrant is the amount the stock sells for above 11.40. Above 11.40 the warrant goes up dollar for dollar with the stock. Of course the warrant price also includes and reflects a lot of confidence the market seems to have for the ultimate success for Company. You get a lot more leverage for your money with the warrants if the drug proves out. Also, if it all works out, the Company gets the proceeds of all those proximately 2.7 million warrants at 11.40 each, which would economically finance quite a bit of the testing and cost to complete the FDA approval process. This was the reason why they created the warrants with the original offering.